Trans Australia Airlines - History - Background

Background

Up until World War II, Australia had been one of the world's leading centres of aviation. With its tiny population of about 7 million, Australia ranked sixth in the world for scheduled air mileage, had 16 airlines, was growing at twice the world average, and had produced a number of prominent aviation pioneers, including Lawrence Hargrave, Harry Hawker, Lawrence Wackett, the Reverend John Flynn, Sidney Cotton, Keith Virtue and Charles Kingsford Smith. Governments on both sides of politics, well aware of the immense stretches of uninhabitable desert that separated the small productive regions of Australia, regarded air transport as a matter of national importance (as did the governments of other geographically large nations, such as the Soviet Union and the United States). In the words of Director General of Civil Aviation AB Corbett,

A nation which refuses to use flying in its national life must necessarily today be a backward and defenceless nation.

Air transport was encouraged both with direct subsidies and with mail contracts. Immediately before the start of the war, more than half of all airline passenger and freight miles were subsidised.

However, after 1939 and especially after Japan's invasion of the islands to the north in 1941, civil aviation was sacrificed to military needs. By the end of the war, there were only nine domestic airlines remaining, eight smaller regional concerns and Australian National Airways (ANA), a conglomerate owned by British and Australian shipping interests which had a virtual monopoly on the major trunk routes and received 85% of all government air transport subsidies.

The Chifley Government's view was summed up by Minister for Air, Arthur Drakeford: Where are the great pioneers of aviation? ..... We discover that one by one the small pioneer enterprises are disappearing from the register. It is the inevitable process of absorption by a monopoly. Air transport, the government believed, was primarily a public service, like hospitals, the railways or the post office. If there was to be a monopoly at all, then it should be one owned by the public and working in the public interest.

In August 1945, only two days after the end of World War II, the Australian parliament passed the Australian National Airways Bill, which set up the Australian National Airways Commission (ANAC) and charged it with the task of reconstructing the nation's air transport industry. In keeping with the Labor government's socialist leanings, the bill declared that the licenses of private operators would lapse for those routes that were adequately serviced by the national carrier. From this time on, it seemed, air transport in Australia would be a government monopoly. However, a legal challenge, backed by the Liberal opposition and business interests generally, was successful and in December 1945, the High Court ruled that the Commonwealth did not have the power to prevent the issue of airline licenses to private companies. The government could set up an airline if it wished, but it could not legislate a monopoly. Much of the press objected strongly to the setting up of a public airline network, seeing it as a form of socialisation by stealth.